The Securities and Exchange Commission ("Commission") today announced that the Honorable Victor Marrero of the United States District Court for the Southern District of New York entered Default Judgments against defendants Michael Akva ("Akva") of Flushing, New York, and Robert Fricker ("Fricker") of Kew Gardens Hills, New York on May 14, 2003 and January 29, 2003 respectively. These judgments settle the Commission's claims against these two defendants in a civil action filed by the Commission on March 14, 2000, alleging that from 1997 through January 2000, these defendants and others engaged in a widespread insider trading scheme that produced over $8 million in illegal profits from trading in the securities of 23 public companies.

The Commission's Complaint alleges that John Freeman, a temporary word-processing employee at Goldman Sachs & Co., Inc. and later Credit Suisse First Boston, tipped a number of defendants about merger and acquisition transactions involving clients of those investment banking firms. The Complaint alleges that Freeman tipped his friend, Akva. Akva traded in advance of seven transactions and realized profits of $104,813. Akva introduced Freeman to Fricker. Both Akva and Freeman provided tips to Fricker, who traded in advance of four transactions and realized profits of $995,303.

The Default Judgments permanently enjoin the defendants from future violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Akva was ordered to pay disgorgement in the amount of $1,100,116 with pre-judgment interest in the amount of $24,668.97 and a civil penalty of $3,300,348. Fricker was ordered to pay disgorgement in the amount of $995,303 with pre-judgment interest in the amount of $256,764.15 and a civil penalty of $2,985,909.

Fricker was found guilty after a criminal trial that was prosecuted by the United States Attorney's Office for the Southern District of New York. Fricker was sentenced on January 7, 2002 to forty-six months incarceration, three years supervised probation, a $1 million fine, a $1,200 special assessment, and ordered to pay $958,000 to the Commission. Akva pleaded guilty on September 20, 2002 after he was extradited from Israel where he fled after his arrest. Akva was sentenced on January 30, 2003 to thirty months incarceration, three years supervised probation, and a $300 special assessment, with credit for time that he served while in custody in Israel awaiting extradition.

The Commission originally sued nineteen defendants. The case has now been concluded against seventeen defendants, including the two default judgments. The Commission settled the case against fifteen defendants and received administrative bars against three of the settling defendants.